Tuesday, June 23, 2009

Scientists getting antsy over possible salary reductions/furloughs at University of California

Just got this via email - a letter circulating at UC Santa Cruz about the possibility of furloughs/salary reductions at the University of California. Basically the issue is that UC is having some major financial trouble due mostly to getting less money from the state of California (due to California's financial problems). And the UC has circulated a memo saying that they are considering 4-8% pay cuts or furloughs that will reduce salary by 4-8% for ALL UC personnel.

This is a bit off putting to many since some personnel get their money from government grants not from the UC budget, but apparently to try and avoid inequality (which of course already exists) or to avoid hard decisions or for other reasons, UC is planning to have these cuts apply to everyone, even if that does not save UC money. I do find it strange that most of the people who work for/with me will get pay cuts which will lead to having extra $$ in my grants to spend. The extra weird thing is, if I cannot spend the money save from salary reductions, then UC loses money due to getting less indirect costs. I personally accept that the budget is in the toilet right now and UC needs to do some drastic things, but I am not sure if this across the board cut makes sense.

Anyway I thought the letter would be of interest to some.

We in the biomedical research community at the University of California, Santa Cruz are writing to express serious concerns about the salary budget cuts proposed as of 6/17/09. This letter represents the concerns of technicians, graduate students, postdoctoral scholars and fellows, research specialists, and project scientists in the departments of Molecular, Cell and Developmental Biology, Microbiology and Environmental Toxicology, Chemistry, Biomolecular Engineering, and Computer Engineering. We generally fall into the category of “staff”, and thus we understand that any staff salary cuts instituted in the future will affect all of us. However, it is important to understand that nearly all of us are paid by funds that do not come from the state of California, but rather from federal grants awarded by the National Institute of Health, the National Science Foundation, and grants awarded by many other public and private agencies. In many cases, the grant has been awarded to a Principal Investigator, and then is used by the Principal Investigator to pay us for our research work. In other cases, the grants are awarded directly to us to cover the salary necessary for our scientific training. So, as the majority of our salaries are not provided by the California state budget, a mandatory salary cut for our staff will not ease the University budget crisis, while it will indeed make our day-to-day living more difficult. Other effects of a mandatory reduction of our salaries are that: 1) This will actually reduce the amount of money the University receives in indirect costs from grants. 2) This will decrease the amount of income tax we pay to the state of California, further exacerbating the existing budget crisis. 3) The depletion of the funds coming into the University of California due to these salary cuts will make it increasingly difficult for the University to support its employees. 4) Lastly, the salary cut propos al may, in the longer-term, undermine confidence in the University of California system and lead talented people to move to states that are able and willing to support higher education and scientific research.

In summary, we strongly urge that no salary cut be instituted for University of California-affiliated personnel like ourselves whose salary is independent from the California state budget. Below you will find our signatures along with those of our supporting staff and Principal Investigators. Sincerely, The biomedical researchers of the University of California, Santa Cruz

Plus here is a note from UC explaining their approach on reductions/furloughs:Here is a communication from UC about the furloughs:

June 18, 2009

UC Furlough/Salary Reduction Plan Options – Questions & AnswersA summary of options for systemwide furloughs/salary reductions was sent to the UCcommunity on June 17, 2009. Following broad consultation, President Yudof intends to presenta specific option for approval to The Regents at their July 2009 meeting. To date, no decisionshave been made as to which option will be implemented. Below are answers to questions aboutthe proposals. Additional information will be added throughout this process as answers to otherquestions become available and as the University approaches a decision on this issue.

Are these furloughs/salary reductions intended to be permanent?No – the intent is for these actions to be temporary or short-term in nature, to help the Universitythrough the current budget crisis. As indicated, the proposed duration for all three options isAugust 1, 2009 through July 31, 2010 unless extended by the Regents.

Will furloughs/salary cuts apply to all employees, including faculty and representedemployees? Yes. In order to ensure equity across the University, whichever option is chosen would apply toall faculty and staff, except student employees. The Academic Senate has been closely involvedin consultation on these options. Implementation of the final plan is subject to collectivebargaining for represented employees. The President may recommend a hybrid Plan thatachieves the eight percent reduction in slightly different ways for the various employee groups.

If my salary is not supported by state funds, will I still have to take a furlough or salary cut?Yes – participation is not based on the source of salary funds. Each of the options would apply toUC employees whose salaries are funded by contracts and grants, clinical income and otherauxiliary activity, and general funds.

Will the proposed reductions apply to employees at the Lawrence Berkeley NationalLaboratory?The intent is for whatever option is selected to apply to all UC employees, including LBNLemployees. Since LBNL is funded by the Department of Energy (DOE), UC will comply withall contractual obligations with the DOE.

W ill this be additive for the senior leaders who have already taken a five percent pay cut? The senior UC officials who voluntarily agreed to have their salary reduced by five percent willhave their salaries reduced by a total of at least eight percent under these options.

How will the furlough/salary reduction impact vacation and sick leave accruals, UCRP servicecredit and benefit calculations, and other benefits? Under each option, the intent is to protect benefits and leave accruals to the extent possible. Thismay not be possible in all situations. This issue continues to be evaluated and no final decisionshave been made yet. Approval from the Regents is required to protect UCRP benefits from beingimpacted by a furlough/salary reduction plan.

I volunteered to participate in START to help the University manage the budget situation. WillI have to take further reductions if a systemwide furlough or salary reduction is implemented? How these options impact/relate to the START program is currently being analyzed. Moreinformation on this issue is expected soon.

What’s the difference between the three options? All three options are intended to achieve the same budgetary savings and have the same impacton employee pay -- each option is closely equivalent to an eight percent pay reduction. Option Iis a straight pay reduction with no changes to work hours. Under Options II and III, employeeswill be scheduled to work fewer days and a number of holidays will no longer be paid holidays.

In Options II and III, will I be able to schedule the unpaid day at a time that’s convenient forme and my department, or will the days be pre-scheduled? This is still being looked at. The unpaid days would include a combination of Universityholidays and additional days, but the precise mix of holidays vs. additional days has not beendetermined. The additional days may be pre-scheduled by the University in order to managecritical operations, for example to ensure patient care at a medical center.

For unpaid days, can I "make up" for the lost salary by using my vacation leave, sick leave, orcompensatory time off?No. The objective of these options is for the University to achieve budgetary savings. Accruedvacation, paid time off (PTO), comp time and/or sick leave all are forms of paid time off andthus may not be substituted for unpaid days.

Will furloughs or salary reductions affect the health of the UC retirement plan?The potential impact of the options on the funding status of the UC retirement plan is beinganalyzed by the Plan Actuary, and this will be taken into consideration as decisions are made.

I'm a postdoc at a UC now. This move makes absolutely no sense to me, and frankly, we make so little as is that soon no one will want to do a postdoc. Fairness involves cutting higher salaries at a higher percentage rather than punishing those at the bottom of the scale.

Isn't it ironic how they use the words "equity" and "fairness" to disguise what is basically the easiest choice for the administration? Across-the-board cuts allow them to avoid having to make tough choices by cutting some areas and saving others.

To the anonymous postdoc - I have two postdoc openings in my lab right now, and U. Maryland is not anticipating pay cuts this year! The Washington area has a lot to offer ;-).

Another point I did not see mentioned above. The federal government has announced increased spending programs in the form of grants to researchers in an attempt to stimulate economic recovery. When the state refuses to allow researchers to spend this money then they are undermining Washington's efforts.

Worse than all this, is that the UC administration is pulling the wool over everybody's eyes and this year actually taking very little cut at all! Read what Yudof says and do the arithmetic. It would seem as if he's saying that this year, 2009-10, the deficit is being made up as follows: 1/4 from increase in student fees, 1/4 from salary cuts, and 1/2 by administrative cuts. Nope. Read it carefully. What he's really saying is that 1/4 of it came last year in administrative cuts, and this will continue over to this year. That's the administrator's 1/2. That is, almost no cuts for them this year. This'll eventually come out, just like as in 1991 when the faculty got pay cuts and then it turned out that the administrators didn't really. Again, do the math. Add up student fee increases, and staff cuts, where's the extra needed by the administration? Maybe 50 million over all campuses. Peanuts.

Frankly I find this whole controversy a little bit contrived. Salaries paid from grants are ALREADY capped at what the university decides you should be paid. Most of us could pay ourselves more from grants if our academic salary was increased. To start complaining about this now is not very credible IMO. (And yes, I'm going to suffer from this too.)

The whole argument that grants will now have extra unallocated funds, and (long-term) less overhead for the university to gulp down, also seems specious to me. Grants are undoubtedly going to get smaller anyway; good luck persuading anyone that this was because academic scientists couldn't pay themselves highly enough, as opposed to (say) the federal government being flat broke.

I also don't really understand the suggestion that the UC administration is doing this to duck harder choices ("Across-the-board cuts allow them to avoid having to make tough choices by cutting some areas and saving others."). The implication here seems to be that the administration should allow external budget cuts to distort their merit scale. Is anyone seriously suggesting that less-profitable departments (humanities, more "basic" science) should suffer more in a bad economy? That the dire state of California's economy should herald a two-tier system of "federally funded researchers" and "others"? That sounds like the death knell for UC, *far* worse than a pay cut: divided, academics will fall far more quickly.

Regarding the suggestion by a postdoc that UC should cut salaries "fairly", i.e. make bigger cuts to those with higher salaries, this is obviously a definition of "fair" that is about as precise, rigorous and uncontroversial as a Sarah Palin speech. What about the fact that people with higher salaries are often supporting dependents (because they are likely to be more senior), for example? How does that factor into your definition of "fair"?

I'm not denying that there's probably a fairer formula than simply applying a single percentage cut (hey, I do believe in progressive taxation, after all) but it's a little glib to suggest that the appropriate definition of "fairness" is trivially obvious.

In the absence of an already established formula for determining salaries, ALL salary inequities can be described as unfair, and so can ALL pay raises, pay cuts, or adjustments to the merit scale.

It's not that I don't get that lower-income people will be hurt harder by this, but

In response to what is there - note - I was as careful as I could be to not say how I felt about the whole thing because I am really not sure how I feel. In the end, I simply do not know what else the UC can do except across the board cuts/furloughs. I do think it is strange, as I said, that the people who have state funding for their position, who in good times would have the most stable source of $$$ (since federal grants are never guaranteed) are not going to be affected more by this budget issue. Note I get a significant % of my salary from the state so if state supported people were cut more I would be cut more. So in essence I am saying that it is surprising that my salary is not going to be cut more than people supported by federal grants since when federal grants are hard to get, I still get most of my salary and thus I reap the benefits of state money and should probably accept some of the risk.

Regarding the bigger cuts for higher salaries - I agree with you that this does not necessarily make sense but again I am not sure what the best solution is.

What I was trying to do with the post is to simply put it out there that people are getting antsy o that more people would discuss the issues.

It's not that I don't get that lower-income people will be hurt harder by this, nor do I miss the incongruity of imposing budget cuts on salaries that are not paid from that budget, but there is a fundamental issue here of whether tenured academics deserve to have their salaries underwritten by the state *and* retain the freedom to seek higher salaries elsewhere.

Possibly they should, but it seems extremely likely to me that this could easily weaken academic diversity if executed carelessly.

In any case, I would like to see the arguments made in terms of the collective obligations and rights of academic tenure, and not with irrelevant arguments about how much overhead the university stands to gain or lose.

I just want to point out that the money that's brought in on large federal grants (NIH, NSF, etc.) is mostly non-fungible. The funds are brought in to the university, which takes its (usually exorbitant) cut, and the remainder can only be used to fund a specific research program with specific staffing needs.

Money brought in by social science and humanities, by contrast, is mostly fungible (excepting our own NIH and NSF grants) -- it largely comes from teaching hours, and it can be spread around the university as the university's needs dictate. At my UC (and from what I understand, most others), social sciences -- which tends to have few full-time positions, post-docs, etc. compared to biological/physical sciences -- ends up doing over 60% of the teaching at the entire university (and thus bringing in that money from fees and from state per-student budgeting). What this means is that the teaching work done by those in the social sciences is largely what allows for those working in the natural sciences and engineering to be bought out of their teaching obligations and work on their grants (and thus staff their research projects)-- which is to say, the work done in social sciences allow people in the biological and physical sciences to have their jobs.

In other words, we're all in this together. It's not a simple matter that some people work off grants and others don't. Working off grants is only possible precisely because of the work other folks are doing all over campus. That's the way the university is set up.

Read Charlie Schwartz's website about this, look at part 19. It's true that NIH grant money is not fungible, but money from all sorts of other sources, like medical centers, is, and reducing the salaries of employees in these units will then generate $348 million of profit that can be transfered to the administrators. That's probably why they're uniformly cutting everyone's pay. If they were to use the extra money generated by these overheads, the salary cuts, he calculates, would only be about 3%.